Lord Thomas of Gresford: My Lords, before the noble Lord sits down, will he concede that Mr Roger Williams spoke strongly in favour of the Welsh proposals on behalf of the Liberal Democrats in the House of Commons? However, because of the mixture of the Welsh provisions with the English provisions, he was constrained to vote with the Conservatives.

Lord Roberts of Conwy: My Lords, I hope that the noble Lord understands that had his honourable friend's vote prevailed, the Welsh clauses of which he approved would also have been lost, along with the rest of the Bill.

7.46 p.m.

Baroness Howells of St Davids: My Lords, at this stage it is difficult to imagine that there is anything left to say, after the well informed speeches that we have heard. However, like everyone here, I have a personal interest in healthcare and a particular interest in the health service. Because of the nature of the concept of the National Health Service, I make no apology for returning briefly to the basic facts of its setting up.

When the National Health Service came into being, it was rightly celebrated as something new and dynamic, providing help for those who were most in need. From its inception, the National Health Service has echoed three national values: fairness, equality and universality. Those three values are as pertinent today as they were 50 years ago. The NHS provides fairness by providing treatment consistent with need. It provides equality by ensuring that all users receive treatment to the same standard. It provides universality by providing the same standard of treatment throughout the UK. Today, the practicalities of running the health service have challenged those values.

Years of underfunding and a new society that has higher expectations of what a modern health service should provide now demand fundamental changes to the way in which it operates. The health service has always done its best, but it is not just a question of how close it can come to helping the public; it is now time to define what the public want and to modify the health service to fit those needs.

Someone asked whether we needed a revolution. The answer is, not really. The Bill is a brave step to capture what is required, confirming the Government's commitment to reforming, not rejectingreforming working practices, but not rejecting a service that is free at the point of use and available to all in need.

The Bill is a step change, drawing to a close the days of "doctor knows best" and empowering users to make an informed choice about the care that they receive. I am disappointed that the opportunity has been missed

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to introduce patient councils, because patients' wishes should be given high consideration when modernising the health service.

I also urge Ministers to listen to the Royal Colleges. They are not all stereotypical, high-inertia, retrospective organisations, unwilling to accept reform, as they are sometimes perceived. In fact, they could be forward-looking, professional bodies which agree that the time has come for change within the health service.

I am sure that the Government will accept that health professionals have seen reforms, changes, and initiatives come and go, to limited effect. We must accept that this climate of change breeds a certain amount of cynicism. Being "on the shop floor", so to speak, these self-same professionals have very clear opinions on what must be done to improve standards of care. These opinions are mostly founded on evidence-based research and reviews of current practice undertaken by college members. I ask: why not examine what the Royal Colleges are saying, and work with them through consensus?

I know that health service personnel, especially midwives, are at a very low ebb at the moment. A major contributor to this low morale is the perception among staff that, given the proper resources, they could provide a higher standard of care for the public. However, even with resources, we are all aware that they cannot do so without reform. I believe that that is what the Government are trying to do now in order to provide more commitment and better standards of care to individual users. Some of the innovations needed by the health service are already in use, as I heard today. There are examples of midwives changing their working practices to provide more care for women, even though it sometimes results in staff working longer hours.

Another factor in these circumstances contributing to low staff morale is the low level of pay compared to that in the private sector. Again, in midwifery, many people are entering the service every year, but we know that almost as many skilled staff are leaving. The Deputy General Secretary of the Royal College of Midwives describes this as,

"running a bath with the plug out".

Pay has risen relative to inflation, but it is still a long way behind what it should be. I believe that this Bill will allow equitable standards by allowing the trusts to decide on their pay levels.

The proposed new role for primary care trusts in the planning and delivery of healthcare is pivotal in respect of the strategic targeting of resources. The location and style of primary care delivery will decide whether or not these reforms are successful. PCTs can take this opportunity to provide services that actively engage communitiesa model that has proved to be both efficient and effective.

I support the Government's view that healthcare professionals should have more autonomy in their respective fields. Midwife-led maternity units are proving a success with staff and women alike, because women benefit from continuous care. With the

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enhanced role being give in this Bill to the Commission for Health Improvement I ask that healthcare specialists are consulted on guidelines and framework development. By working with these professionals we shall achieve the best outcome for the public.

In conclusion, when considering working with all stakeholders, health service administrators, health service professionals, especially as regards the Government's new initiative of patient forums, I dare to propose that great care is taken to ensure that due attention is given to the diversity within the nation. In that way we shall develop a health service that meets all of our requirements and thereby leave a lasting legacy to those who come after us. As this Bill passes through the House, we can be truly proud that it will create the sort of service that we would all wish to have.

7.54 p.m.

Baroness Northover: My Lords, this has been an extremely important debate. When this morning I read the speech of my noble friend Lord Clement-Jones condemning the Bill, I must say that I thought the Minister, being a very reasonable sort of chap, should simply put up his hands and say, "You're right. I am sorry; we'll think again". When I heard the tour de force of the noble Earl, Lord Howe, I knew that that was what the Minister should do. Two hours of the debate had gone by before there was any real expression of support for the Minister; namely, from the noble Baroness, Lady Pitkeathley. Even then, she warned of the dangers of putting into place a new inspection system for care standards, only to replace it with another in short ordera point also made by the noble Baroness, Lady Howarth.

If one looks at the National Health Service historically, one sees that it is a history of organisation and reorganisation. When I taught medical students at University College London the history of their NHS, it was a catalogue of such reorganisations. In the early years there were gaps of five years, or so, and sometimes longer. But in recent years the pace of attempted change has sped up and become faster and faster. The noble Lord, Lord Walton, mentioned that 17 changes had taken place during his career. On Second Reading in another place, Stephen Dorrell gave a very telling commentary on more recent history when he said:

He admitted to abolishing family health services authorities. Does he believe that it helped? I think not.

I understand the Minister's frustration. The Government claim to be putting more money into the service. They would be more believable if they did not announce and re-announce allocation of the same funds. They certainly needed to put more money in, given the starvation of the health service over so many preceding years. Yet they seem not to be able to turn things around. They announce more money for

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cancer. It is top-sliced all the way down by managers trying to fill black holes. It does not get to where it was supposed to be, and both patients' and clinicians' disappointment and anger become all the more palpable because of the promises made and broken. No wonder the Minister despairs. He tries to pull a lever in Whitehall and nothing happens on the ground.

So decentralisation is the order of the day. But is it? The noble Lord, Lord Walton, mentioned Big Brother in Nineteen Eighty-Four. I believe that we can see double-speak here, too. The Minister talks about decentralisation; yet, as the noble Earl, Lord Howe, and my noble friend Lord Clement-Jones have pointed out, the opposite is the case. Instead, we have 58 new powers for the Secretary of State and another layer of management.

What, in their desperation to achieve change, are the Government proposing? Barely months from full-scale reorganisation we have another set of reorganisations. Perhaps the re-creation of district health authorities might do it. Alternatively, let us try again to break up one of the potential voices of criticism; namely, the CHCs. But, even here, there may be a laudable aim of giving patients a greater voice. But in these proposed changes the patient is viewed from the insideas someone who knows his or her way around the health service, not as someone who most of the time does not want to think about the service. People just want to know that it is there when it is needed. The Government seem to think that greater control over the professions would sort out such problems. So they decide to set up a quango to oversee them. I do not doubt that the Government's heart is in the right place in that they genuinely support the NHS, although clearly they sometimes wish that it would go away.

Surely the Government have enough collective memory to realise that this reorganisation on top of reorganisation is unlikely to produce the change that they say they seek. They know that or they would not have asked Professor Ian Kennedy to report on the lessons from Bristol, or Mr Adair Turner to look at NHS structures and report in the autumn. But they are already looking down the track to the next general election with real and deserved trepidation. When the Prime Minister says that unless the Government turn round the NHS they will have failed, Mr Milburn and his colleagues must quake in their shoes. Hence we have action at any price.

I should like to remind your Lordships of some of the contributions to the debate. I note that the noble Baroness and former Minister, Lady Hayman, slipped away without choosing to speak.

Both the noble Earl, Lord Howe, and my noble friend Lord Clement-Jones gave devastating critiques of the Bill. The noble Lord, Lord Chan, spoke most effectively of his concern about the possible deterioration of qualitynot improvementsas a result of these changes.

The noble Lord, Lord Turnberg, gently gave warnings that were profound and grave. He spoke of the Bill being a danger to tertiary services, preventive

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medicine and public health. Although he approves of the Government's apparent aspiration to improve the public accountability of the medical profession, he said that, rather than public accountability, we were heading towards state control. Although he clearly credited the Government with good intentions, he gave no reasons for not abandoning the Bill.

The noble and learned Lord, Lord Howe of Aberavon, noted that no sooner was one upheaval over than another began. As we have heard, it is worse than that. No sooner is one upheaval under way than another is initiated. As the noble and learned Lord said, we are indeed right to be alarmed.

The noble Baroness, Lady Finlay, pointed out that the profession is exhausted, time is needed for change, and much is likely to be lost from further changepoints that were explored further by the noble Baronesses, Lady McFarlane, Lady Hanham and Lady Masham. "Stop meddling", said the noble Baroness, Lady Cumberlege, "Governments are hopeless managers". The right reverend Prelate the Bishop of Birmingham spoke of the immense human cost of yet another reorganisation.

The noble Baroness, Lady Gibson, and the noble Lord, Lord Freeman, expressed concern, as have other Lords, about the abolition of CHCs. Meanwhile, the noble Lord, Lord Walton, summed up a theme that has run through this debate when he spoke of an NHS in despair, the Government defending the indefensible, and proposals that should be consigned to the dustbin where they belong.

Most of your Lordships were here for the debate and heard those contributions made far more eloquently than I could. I remind you of them because if the Government ride roughshod over this barrage of criticismcriticism that crosses all parties and none, when all today have made very clear their commitment to the NHSthey are not only foolhardy, they are simply destructive.

Ultimately, the question we have to ask is whether the proposals will improve patient care. Will these measures help to recruit and retain the staff so badly needed to assist patients? Will they help to build patient and public involvement in the NHS? Will they provide the resources needed to bring the health service up to European standards? Are they more helpful than damaging?

As our debate has so dramatically shown, the Bill passes none of those tests. I think that the Minister knows in his heart of heartshe has a lot of experience in the health servicethat that is the case. The lack of support he has received from his Benches bears that out. I trust that the Minister, being that reasonable chap, will indeed rethink.

8.4 p.m.

Baroness Noakes: My Lords, this has been a good debate with contributions from some real experts in NHS matters. However, the whole concept behind the Bill has been opposed in very powerful speeches by my noble friend Lord Howe, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady

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Northover. I almost felt sorry for the Minister, especially as he received so little support from his own Benches.

We have heard from many noble Lords about the big problems with the Bill, which has been characterised by my noble and learned friend Lord Howe as part of an endless marathon of monolithic upheaval. We have also heard about the increasing centralisation and lack of readiness in PCGs and PCTs. There are also huge concerns about the new council for the regulation of health care professionals. The noble Lords, Lord Turnberg and Lord Walton of Detchant, and the noble Baroness, Lady McFarlane, spoke powerfully about those concerns.

We have also heard much about the Government's further attempts to murder our old friend the CHCs, on which many noble Lords spoke, particularly my noble friend Lord Freeman.

The bottom line is that many of the proposals are wrong or unnecessary. They will absorb time that could be spent doing other things in the NHS. As my noble friend Lady Hanham said, for many NHS staff who are already severely overworked, the proposals may even be the straw that breaks the camel's back.

The Bill does not address the big issues in the NHS such as waiting lists, decimation of the care home sector, deteriorating A&E facilities and the "national disgrace"as my noble friend Lady Cumberlege described itof having to send patients abroad to be treated. Morale among doctors and nurses is bad. What will the Bill do to address those issues? It will do absolutely nothing. That is why so many despair at this Government.

Instead, before the ink is even dry on the page, the Government are creating more instability and uncertainty. The Secretary of State has already announced his next round of reforms involving the private sector and foundation hospitals. He has already given the response to the Bristol inquiry, promising more changes. I offer my deepest sympathy to the Minister for having to bring this Bill to your Lordships' House while knowing that the rules are already being rewritten.

I noted the wish of the right reverend Prelate the Bishop of Birmingham for the NHS to be left alone after this round of reorganisation. All I can say to him is "dream on". We know that the desire for change does not stop at Richmond House but is alive and well in the Treasury, with Mr Wanless's review, and in No. 10 Downing Street with the secretive study being done by Mr Adair Turner. So we expect the Minister to be back before us with yet another round of so-called modernisation reforms. We on these Benches therefore have much sympathy with the Motion in the name of the noble Lord, Lord Clement-Jones.

I shall not address Welsh issues as they have been ably covered by my noble friend Lord Roberts, but I should like to address some of the others. In doing so, I make no apology for returning to the themes of over-centralisation and haste.

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The Government pretended in their document, Shifting the Balance of Power, to be keen on decentralisation and passing powers down to the front line. If the NHS were a genuinely open organisation, the Secretary of State would not have issued his consultation document with a consultation period of only six weeks during the summer holidays. He also would not have pressed ahead with plans to demolish two-thirds of health authorities and foist responsibilities on to an unready primary care sector until he had genuinely listened and consulted.

No one in the NHS was surprised at the Secretary of State's actions. They were not surprised when the chief executives and boards of the new strategic health authorities were put in place by the end of last year, before this Bill had even completed its passage in another place. They were not surprised that PCTs were being created or merged regardless of what local doctors said. They have all grown used to a dictatorship since 1997.

The Secretary of State is relentlessly pursuing his proposals without regard for those who have to implement them. There are very real concerns about the pace of change for PCTs. That matter has been raised by a number of noble Lords, including the noble Lord, Lord Chan, and, indeed, the right reverend Prelate. Many questions need to be asked about the capacity of new PCTs across the board to deal with the new responsibilities for commissioning and public health, whether they have chief executives who are up to the task and whether they have adequate IT. Important points were made during the debate about whether or not specialist services will be commissioned adequately by these new organisations, which have limited capabilities at present.

However, the concerns are not only just about the speed of change but also about the kind of arrangements that will be in place once the reforms are implemented. We should not be fooledthe Secretary of State is not giving up powers in a real sense; he is gaining powers. The Bill tells us nothing about the new regional directors of health and social care recently created. These are the Secretary of State's creatures who carry out his wishes behind the scenes. We had an example of that only last week when the regional director for the South East told the NHS in the South East to stop spending moneythat is code for "stop treating patients"so that the books would balance. The accountability of these directors is an important issue and one to which I hope that we shall return in Committee.

I shall now turn to the financial aspects of the Bill. The Government should be concerned about the finances of the NHS but the plain fact is they have now learnt how to put money into the NHS but have not learnt how to get anything out of it. Despite the increased money that is now going in, the Government are getting precious little in return. For example, elective acute activity actually fell in the quarter to June 2001. There is nothing in the Bill that will make it more likely that taxpayers will get value for money from these extra resources. In the short term there will be a cost to these reforms. The financial section of the

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Explanatory Notes tells us nothing about the transitional costs but they are likely to be significant. Will the Minister say what additional costs are being incurred in creating these new structures and implementing the provisions of the Bill? Will he ensure that all NHS bodies and the Department of Health are recording all of the transitional and ongoing additional costs so that we can look at extra costs in due course and compare them with the benefits?

Will the Minister say what has happened to the much trumpeted £100 million of management cost savings? That was even included in the Labour Party's manifesto with the promise that it would be available for "investment in frontline services". But no one in the NHS thinks that there will be any net saving from the Bill. How on earth could there bethe Bill will turn 95 health authorities into 28 strategic ones and over 300 PCTs carrying out health authority functions?

Paragraph 199 of the Explanatory Notes states that there will be,

"savings in management over time".

But in the next breaththat is, the next sentenceit states that there will be no increases or decreases in manpower. In all of my experience of the NHS I have never found out how to save money without reducing manpower. I ask the Minister what has happened to the £100 million, or is it just another election promise already broken?

There are other financial features of the Bill to which I am sure we shall return in due course. For example, the Secretary of State will retain full control over the financial levers of the NHS. He will decide upon allocations to PCTs in the usual non-transparent way. He will hold powers to give and take back so-called "performance fund moneys" based on his assessment of performance. He will be able to judge performance based on criteria determined after the event. In fact, he will have all of the powers that Stalin would have devised for himself if he were Secretary of State.

Lastly, I come to the Commission for Health Improvement. Potentially, CHI is a good thing for the NHS, especially if it can concentrate on its important inspection role and not get dragged into star ratings and other gimmicks. It provides an opportunity for independent evaluation of the NHS. But CHI has to be genuinely independent and for as long as it has to go cap in hand to the Secretary of State for its finances it will never be independent, even after the modest changes in the Bill. I hope that we shall examine in Committee how to ensure the proper independence of CHI. We believe that the remit of CHI, especially a properly independent CHI, should be broader. It is perhaps pleasing to note that the Secretary of State now appears to be a convert to that view.

There are too many bodies operating in the broad field of standards of care. There is no need for a separate national care standards commission. I listened carefully to the noble Baroness, Lady Howarth, who was enthusiastic about the task of that commission. But there is no need for a separate body.

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There is no need for a separate national patient safety authority. There is no need for NICE to be separate. There is a glaring omission in CHI's remit in relation to public health services. The Bill should deal with those kinds of core issue rather than peripheral ones such as CHI's relationship with the Audit Commission which is, incidentally, a properly independent body.

This is a disappointing Bill. It does not address the right issues. Its main effect is to give legislative cover for a harmful process; namely, the increasing pressures put on the NHS through yet another unnecessary restructuring. I know that noble Lords will work valiantly to try to improve the Bill during its passage through your Lordships' House but it is a pity that we cannot spend our time more fruitfully and leave the NHS to get on with the job of delivering patient care.

8.17 p.m.

Lord Hunt of Kings Heath: My Lords, this has been a very good debate. Every noble Lord who has spoken has brought a great deal of experience, expertise and knowledge of the National Health Service to the debate. I was struck by the warmth with which the Bill was received. I look forward to a short Committee stage in which we shall no doubt tease out one or two of the issues that we have discussed so far.

Of course, the test of the Bill is the test which the noble Lord, Lord Walton, posed to me; that is, will the Bill help improve patient care? I want to answer in the affirmative. As my noble friends Lord Harris of Haringey and Lady Howells suggested, far from being the over-centralisation feared by some noble Lords, what the Bill essentially seeks to do is to lead to a patient-led, decentralised NHS operating within a framework of central, national standards regulated independently. Those national standards will give the NHS the ability to decentralise and to let go to a much greater extent than has ever occurred in the health service before. It is in that context that I am convinced that through these changes we shall ensure that the innovation and the leadership that we need at local level will be enhanced and that through that we shall deliver much more effective and sensitive patient services.

I listened to the remarks of the noble Lord, Lord Clement-Jones, the noble Earl, Lord Howe, and the noble Baroness, Lady Noakes, and to the points that they made about centralisation versus decentralisation. The noble Lord, Lord Clement-Jones, talked about initiative overdrive. I point out to the noble Lord that I have had the great pleasure of responding to debates instituted by him over three-and-a-half years. I cannot remember one instance in which the noble Lord has asked the Department of Health to withdraw from an instruction that has been given to the NHS. The tenor of all the points that he has put to me during those three-and-a-half years has been for more regulation, more instruction and more direction for the health service. Even the noble Earl, Lord Howe, who is in the guise of an arch-decentraliser this week, asked me only a week ago to earmark specific funding for the cost of decisions of the National Institute for Clinical Excellence.

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My purpose in making those remarks is to point out that there is a real debateand, I think, dilemmabetween centralisation and decentralisation in a national health service when Ministers are accountable to Parliament. If my noble friend Lord Bruce were here, he would remind us of the debates in the post-war Labour administration between Bevan and Morrison about whether or not the NHS should fall within local government. It was eventually decided that there should be a national health service but the intention was to decentralise as much as possible to the local level. Governments of both parties since 1948 have increasingly found that balance very difficult.

In that context, I also refer to manyat least four or fiveof the previous government's efforts on restructuring. The noble and learned Lord, Lord Howe of Aberavon, referred to the 1974 reorganisation. Noble Lords will remember that, disastrously, it took away powers from local hospitals. I remember working in a hospital in Oxfordshire where about 10 boards were abolished and one health authority took over the whole county. I also refer to the internal market reorganisation of 1991. Part of that was about decentralisation. However, because it took place in the absence of national standards and a national inspectoratemany of us pleaded at the time with Kenneth Clarke to introduce a national inspectorate along with decentralisationwe ended up with a bureaucratic morass. As soon as that government found problems with the local implementation of those reforms, they immediately galloped in to ensure that the so-called internal market was very much inhibited.

I accept the point made by the noble Baroness, Lady Cumberlege; namely, that the lesson for all governments is that we have to stop tinkering and interfering and allow the health service to get on with the job. The conditions under which that must happen in a national service include ensuring that we have national standards and a national framework. That is why we produced national service frameworks and set up NICEan independent inspectorate to check that things are satisfactory and that high standards are being developed. In that context, it is perfectly possible to withdraw from the micro-management of the health service. That is what we are seeking to do.

I listened with great interest to the comments of a number of noble Lords on the King's Fund report. It is an excellent report, and I agree with much of its thrust. I am not particularly keen on the public corporation idea. I await with keen interest to see how many amendments the noble Baroness, Lady Cumberlege, will table in Committee to allow us to debate that. The problem with the public corporation model is that there is no guarantee that, having created a public corporation, it would not be as centralist as any micro-management from Whitehall. That is why our approachnational standards, an independent inspectorate and devolution to local bodiesis the right way forward.

Noble Lords will know that last month my right honourable friend the Secretary of State met the chief executives of the three-star trusts. That was not a

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gimmick; they are people who have succeeded in improving the quality of care. They argued, in discussion with the department and Ministers, that we should look at the governance of NHS trusts to see whether we can go further and give them greater independence in future. That is where the whole concept of foundation hospitals comes in. That is well worth pursuing. The more independence that one can give those local institutions, the more involvement there is and the greater the ownership by local communities, the more we can make this new set of arrangements work effectively.

I say that by way of introductionit is the basic philosophy of what we seek to achieve. I turn to specific points about the Bill. I say to the noble Baroness, Lady Mashamwho, like a number of noble Lords, was a member of a regional health authority some years agothat the title "strategic" health authority is deliberate. We regard the 28 health authorities as being strategic, rather than seeking to micro-manage the local health service. The importance of primary care trusts comes into play in that regard.

The noble Earl, Lord Howe, and the noble Lord, Lord Chan, asked about the pace of change in creating primary care trusts. I accept that one route for the evolution of PCTs would be to take a staged approach to their introduction. However, I am satisfied, having talked to many in the health service and those working within PCTs and primary care groups, that, on balance, it is better to move quickly to a structure in which PCTs cover the whole country. As my noble friend Lady Pitkeathley said, primary care is of such importance that we need to get on quickly with those trusts.

The noble Lord, Lord Clement-Jones, and other noble Lords asked about the capacity of PCTs to take on the very great responsibilities that they are being given. Unlike some noble Lords, who seemed to be in a rather negative frame of mind tonight, I am optimistic. Judging by the PCTs that I have visited and the innovation that I have seen, I think that they can rise to the challenge. They are already getting to grips with some of the big problems in primary care and in commissioning. I have no doubt that, with enthusiasmand if good quality people go into PCTsthey will rise to the challenge. We are setting up development programmes to help managers. People will move from health authorities into PCTs and we are taking a close interest in the training programme for chairs and non-executives. PCTs have an awful lot of expertise and can make significant contributions.

Several questions were asked about specialist services. The intention is that PCTs will be responsible for commissioning specialised services for their population. They will be accountable to the strategic health authorities. That will enable the health service as a whole to ensure that that is done effectively.

I turn to the vitally important issue of public health. The noble Lord, Lord Clement-Jones, and my noble friends Lady Pitkeathley and Lord Turnberg asked

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various questions about where the public health function fits in with the new arrangements. The key decision is that the key public health body will be the PCTs. That is absolutely right because it is the PCT that relates to a population. Requiring PCTs to appoint a director of public healthin making that vital connection between primary care and public healthwe have the makings of a very strong public health function.

I listened with keen interest to the comments of my noble friend Lord Turnberg about the whole issue of public health surveillance. We are taking forward discussions in light of the CMO's report. The intention is to ensure that whoever has that function and however it is delivered, there will be an integrated approach. I am very happy to discuss that further with my noble friend.

Again, I should expect PCTs to take a strong role in relation to sexual health, and in particular in relation to commissioning services. I readily acknowledge that that is a very serious area. The rise in sexually transmitted illnesses is a big problem and we must ensure that GUM services meet the challenge that is faced.